Recent Amendments in PF & MP Act, 1952

As part of the third article in our 3 part series, we present the recent amendments in the PF & MP Act 1952 in a simple tabular form.

We hope this series will be helpful to all our readers.

Key amendments of P.F & M.P Act 1952 along with schemes there under

0S.No

Section/Para

Pre-amended position

Post -amended position

1

Para 22 of EDLI

A person entitled to receive P.F accumulations of a deceased member of a fund or Provident fund exempted under Sec.17 of the P.F Act, is also entitled to receive an amount which is equal to the average of the balances in the P.F account of the member during the preceding 12 months or during the period of membership of the deceased employee whichever is less. If such average balance exceeds Rs.35000/, he is entitled to receive Rs35000/+ 25% of the amount in excess of RS. 35000/- subject to the maximum of Rs 65000/-

Now after the amendment, the ceiling limits of the average balance of Rs.35000/- has been revised up to Rs.50000/- and in case the average balance exceeds Rs50000/- the person is entitled to receive an additional40% of the amount in excess of Rs 50000/- instead of the previous 25% subject to the maximum of Rs.100000/-(Rs. one lakh)

2

Para 22 of EDLI scheme

Non existent

The new Sub-Para (3) has been inserted after sub-Para (2) of Para 22. This Para stipulates the formula of paying an additional sum under EDLI scheme, in addition to P.F accumulations, to a person entitled to receive the P.F accumulations of the deceased employee who is a member of the Provident Fund exempted under Sec.17 of the P.F Act , if such deceased employee was in employment for a continuous period of twelve months preceding the month in which he died.

Formula :

Average monthly wages drawn during the preceding 12 months( subject to the maximum of Rs. 6500)/- X 20 or the amount of benefit calculated u/ Sub-Para(1) of Para 22 whichever is higher.

It means, if an employee covered under EDLI Scheme dies and was in employment for a continuous period of 12 months preceding the month in which he died, the benefit payable under EDLI scheme has to be calculated as per the formula under Sub-Para(1) of Para 22 and also as per formula under Para (3) and whichever benefit is higher ,has to be paid to the person entitled to receive it .

Similarly an explanation has also been added to stipulate a formula in case of death of part time employees serving in more than one factory or establishment for a continuous period of 12 months.

3

Para 60 of P.F. Scheme 1952

Non existent

Sub-Para (6) was added to Para (60). As per this interest shall not be credited to the account t of the employee from the date on which it has become inoperative.

An account becomes inoperative under Para.72(6), if no claim has been made within three years from the date it becomes payable

4

Para 72(6) of P.F. Scheme 1952

The existing sub-Para (6) permits transfer of certain sums , incapable of being paid to the employee/legal heirs either for want of address or for want of receiving a claim for the same, to an inoperative account if no claim has been preferred within 3 years of from the date on which the amount becomes payable.

After the amendment, the period of thirty six months (but not three years) needs to be computed from the date of preferring an application for withdrawal under Para s (69) or (70).

5

Para (20) of Pension scheme 1995

As per Para(1)&(2) of Para (20) the employer has to submit a consolidated return of the employees entitled to become members and a return of employees leaving service in physical form to the commissioner .

Now Para (5) has been added after Para(4) whereby such returns shall be submitted in electronic form in the format prescribed by the Commissioner.

6

Para 10 of EDLI scheme

As per the existing sub- Paras (1)(1-A) &(1-B), the returns specified in them shall be sent to the Commissioner in physical form.

A new Sub-Para(3) has been added requiring the returns specified in Sub-Paras (1)(1-A) &(1-B) to be submitted in electronic form

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